Microsoft's Profit Jumps But Sales Growth Is Weak

[HenryTo]

Microsoft's Profit Jumps
But Sales Growth Is Weak

A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
April 28, 2005 4:25 p.m.

Microsoft Corp. said its profit nearly doubled in the fiscal third quarter, as the software giant recorded fewer legal expenses, but revenue growth was below the company's expectations.

The world's largest software company posted net income of $2.56 billion, or 23 cents a share, for the three months ended March 30. A year earlier, it had a profit of $1.32 billion, or 12 cents a share.

In January, Microsoft forecast a fiscal third-quarter profit of 27 cents to 28 cents a share, including stock-based compensation expenses but excluding items.

Revenue was $9.62 billion, up 4.9% from $9.18 billion a year ago, missing Microsoft's January forecast of sales between $9.7 billion to $9.8 billion and analysts' prediction of $9.83 billion.

During the quarter, the company booked $714 million in charges to cover antitrust claims, including a charge to settle a dispute with Gateway Inc. -- pushing the company's spending on such settlement costs above $3 billion over two years. In Europe, the company has agreed to sell a version of Windows without its multimedia software, but regulators are seeking even more concessions.